Perspectives on Audit Opinions and Key Audit Matters in the Global Airline Industry and the COVID-19 Pandemic

Abstract

The present study investigates whether the COVID-19 pandemic had a negative effect on audit opinion and led to differences in the composition of key audit matters (KAMs) observed in the airline industry. This study uses a sample of 55 airlines whose financial statements are based on International Financial Reporting Standards (IFRSs) and whose financial statement audit follows National or International Standards on Auditing (ISAs) for audit opinion, as well as a sample of 42 airlines whose financial statements are based on IFRSs and whose financial statement audit follows ISAs for the composition of KAMs. A textual analysis, a content analysis, a frequency distribution, and a chi-square test were conducted for the periods before, during, and after the COVID-19 pandemic. The findings reveal that the COVID-19 pandemic had no significant effect on audit opinion, except for one airline whose audit report declared a disclaimer of opinion. In contrast, the impairment of goodwill and intangible assets (as an industry-specific KAM) and going concern (as a KAM specific to the COVID-19 pandemic) were the two KAMs that were typically observed during the COVID-19 pandemic due to increased uncertainty. This was found to be the case, even though the main KAMs in the airline industry are usually revenue recognition; lease accounting; property, plant, and equipment (PPE); and hedge accounting. This study contributes to the debate on the effect of the COVID-19 pandemic on audit opinions and KAMs by offering evidence from the underexplored airline industry. © 2025 by the authors.